Also, states and municipalities have many revenue streams. People think mostly of property, personal income tax, and sales tax because these are the ones that are most visible.
There are also excise and specialty taxes. Cigarettes, alcohol, gasoline, marijuana, guns. Hotel taxes. Parking taxes. Port and airport levies. Taxes on specific occupations. Taxes on hospitals. Toll roads and bridges. Business taxes. Special temporary taxes levied to fund a specific project. Land leases/sales to private enterprises.
And then you can also adjust the spending side of the equation. Just because the State next door subsidizes something doesn't mean you have to. There are many levers to adjust to get to the desired budget.